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Heavy Iron Oilfield Services, L.P. v. Mountain Equipment of New Mexico, Inc.

United States District Court, Western District of Pennsylvania

August 6, 2014

HEAVY IRON OILFIELD SERVICES, L.P., a Pennsylvania Limited Partnership, Plaintiff,
v.
MOUNTAIN EQUIPMENT OF NEW MEXICO, INC., a New Mexico corporation, Defendant. Re: ECF No. 3

OPINION AND ORDER

KELLY, Magistrate Judge

Plaintiff Heavy Iron Oilfield Services, L.P. (“Plaintiff”), has brought this contract action against Defendant Mountain Equipment of New Mexico (“Defendant”), relative to Plaintiff’s purchase of equipment from Defendant that allegedly failed to meet industry standards thereby rendering the equipment useless for their intended purpose.

Presently before the Court is Defendant’s Motion to Dismiss for Lack of Personal Jurisdiction (“the Motion”), filed pursuant to Federal Rule of Civil Procedure 12(b)(2). ECF No. 3.[1] For the reasons that follow, the Motion will be denied.

I. FACTUAL AND PROCEDURAL BACKGROUND

According to the Complaint, Plaintiff is in the business of providing “oil and gas field services, ” and Defendant is in the business of providing “oil and gas-related equipment for well testing and flow back services.” ECF No. 1-3, ¶¶ 5, 6. In particular, Defendant sells “sand traps” which are used in the oil and gas industry “to protect downstream equipment by removing sand from oil and gas.” Id. at ¶ 9. Plaintiff alleges that it purchased two sand traps from Defendant in June of 2011, and another two in December of 2012. Id. at ¶¶ 7, 8.

According to Plaintiff, each sand trap contains a pressure vessel that must meet the standards established by the American Society of Mechanical Engineers (“ASME”), and be certified by the National Board so that operators can comply with applicable regulations and use the sand traps for their intended purpose. Id. at ¶¶ 10, 11. Plaintiff contends that Defendant was not only generally aware that pressure vessels used in sand traps need to be ASME compliant and certified, but that Defendant had specific knowledge that Plaintiff required ASME compliant and certified pressure vessels as evidenced by the invoices for the purchase of the sand traps generated by Defendant which reflect those requirements. Id. at ¶¶ 11, 12. Nevertheless, following delivery of, and payment for, the sand traps, Plaintiff was notified that the pressure vessels used in the sand traps do not comply with ASME standards and are not certified by the National Board.[2] Id. at ¶¶ 13, 15, 17. Plaintiff alleges that it is consequently unable to use the sand traps for their intended purpose and requested that Defendant either refund the purchase price of the sand traps or replace them with ones that are ASME compliant and certified by the National Board. Id. at ¶¶ 19-21. Defendant, however, has apparently refused to honor either request. Id. at ¶ 21.

Plaintiff filed the instant Complaint on December 10, 2013, in the Court of Common Pleas of Allegheny, Pennsylvania, and on January 8, 2014, Defendant removed the case to this Court based on diversity.[3] See ECF No. 1. In the Complaint, Plaintiff brings claims against Defendant for breach of contract (Count I); breach of express warranty (Count II); breach of the implied warranty of merchantability (Count III); and breach of implied warrant of fitness for a particular purpose (Count IV). ECF No. 1-3.

Defendant filed the instant Motion on January 15, 2014, to which Plaintiff responded on February 3, 2014. ECF Nos. 3, 11. Defendant filed a reply brief in support of the Motion on February 18, 2014, ECF No. 13, rendering the Motion ripe for review.

II. STANDARD OF REVIEW

Once a defendant files a motion to dismiss for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2), the burden is on the plaintiff to "prov[e] by affidavits or other competent evidence that jurisdiction is proper." Metcalfe v. Renaissance Marine, Inc., 566 F.3d 324, 330 (3d Cir. 2009), quoting Dayhoff Inc. v. H.J. Heinz Co., 86 F.3d 1287, 1302 (3d Cir. 1996). The plaintiff, however, need only establish a prima facie case of personal jurisdiction “by establishing with reasonable particularity sufficient contacts between the defendant and the forum state.” Mellon Bank (East) PSFS, Nat. Ass'n v. Farino, 960 F.2d 1217, 1223 (3d Cir. 1992) (internal quotation and citations omitted). See Saudi v. Acomarit Maritimes Services, S.A., 245 F.Supp.2d 662, 667 (E.D. Pa. 2003), aff’d, 114 F. App’x 449 (3d Cir. 2004). Although the plaintiff is entitled to have the allegations set forth in the complaint taken as true and all factual disputes drawn in its favor, the complaint must nevertheless contain "specific facts" rather than vague or conclusory assertions to support a finding that the requisite contacts exist. Marten v. Godwin, 499 F.3d 290, 298 (3d Cir. 2007).

III. DISCUSSION

Under Rule 4(k)(1)(A) of the Federal Rules of Civil Procedure, a federal district court sitting in diversity has personal jurisdiction over a non-resident defendant only to the extent that the laws of the forum state permit it. Under Pennsylvania's long-arm statute, a court may exercise personal jurisdiction over a non-resident defendant which “directly or by an agent . . . [t]ransact[s] any business in this Commonwealth.” 42 Pa. C.S. § 5322(a)(1). Transacting business includes “[t]he shipping of merchandise directly or indirectly into or through this Commonwealth.” 42 Pa. C.S. § 5322 (a)(1)(iii). The statute also provides that personal jurisdiction may only be exercised to the extent it comports with the due process clause of the Fourteenth Amendment to the United States Constitution. 42 Pa. C.S. § 5322 (b). See Remick v. Manfredy, 238 F.3d 248, 255 (3d Cir. 2001).

It cannot be disputed that Defendant in this case shipped merchandise into Pennsylvania and thus transacted business here. The question remains, however, whether the exercise of personal jurisdiction over Defendant would comport with due process.

To assert personal jurisdiction over a defendant, due process requires: (1) that the defendant have "minimum contacts" with the forum state; and (2) that the exercise of jurisdiction comports with "traditional notions of fair play and substantial justice." Remick v. Manfredy, 238 F.3d at 255, quoting International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). "[M]inimum contacts must have a basis in 'some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and ...


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